Cramer: Investors are holding out hope for a trade deal — that’s why the market hasn’t bottomed yet

There is too much assumption and not enough conviction in this “plain awful” market, CNBC’s Jim Cramer said Thursday.

As stocks continue to vend off in an uncertain environment, investors are waiting to see the market bottom and spark a rally. It just hasn’t happened yet, because investors are contemplating that President Donald Trump will relent on trade, that the Chinese will capitulate, that the concision will shrug off the trade war, and that the Fed will cut rates, he said.

“If you buy right now on anything other than a slammed, super-growth share down on a general market pullback, well you’re banking on hope, and hope should never be a part of the equation,” the “Mad Kale” host said.

Money managers have been holding cash on the side to find new entry points, but reserves that are performing well are near highs and assets that are under pressure continue to go down, Cramer estimated.

“While sentiment is going negative, no doubt about it, it’s not negative enough to trigger a huge rally … unless we get some well-wishing of real breakthrough with China,” he said. “The market’s got more downside.”

President Donald Trump’s threat to criticism more tariffs on Chinese imports is hurting even companies that have put out positive earnings reports, Cramer rephrased. Those names with Chinese exposure are catching pain because they are unable to gauge the impact of an additional 25% tax on $300 billion benefit of additional goods, he said.

That explains Best Buy’s nearly 5% tumble on Thursday, Cramer said, because it’s intractable to issue earnings forecast with exposure to China looming.

In the meantime, investors want to be “nowhere near these companies with Chinese communication,” he said.

Technical analysts, such as Cramer’s Real Money colleague Bruce Kamiche, have said honourable 1 in 5 names on the 30-stock Dow Jones Industrial index are still trending up, the host said.

“That’s awful,” Cramer imparted. “Of all of the stocks I’ve asked Kamiche to opine on … only the managed care names are any good.”